The second rationale they discuss, “the competition rationale,” is directed to those communities where broadband is already available from private providers. It goes something like this:

…since broadband offerings, in terms of availability speeds, and prices, are “inadequate,” residents and businesses will benefit from the introduction of a competing municipal network.

Calling this rationale a “pessimistic view of broadband,” demonstrating a “very rudimentary understanding of competition,” the authors say it:

ignores the high levels of innovative dynamism in the U.S. broadband sector, which signal intense competition among firms throughout the emerging ecosystem;

contradicts an array of analyses confirming that, by nearly every measure, the U.S. broadband market is vibrantly competitive;

wrongly position municipalities and [local] policymakers as the best judges of whether the U.S. broadband market or a particular local market is effectively competitive;

likely tilt[s] the playing field against the private sector.

[Government-owned networks] typically result in artificial market distortions, which have especially pernicious effects in a sector that has thrived because of a relatively level playing field among competitors.

Introducing a government “competitor,” whose “competitive advantage” stems from taxpayer (or public ratepayer) – subsidies of both capital and operations “could chill or drive away [private] investment, slow innovation and undermine the very market forces that have fostered a vibrantly competitive ecosystem …”